urge the need for $900,000 gold at once to tide over the present crisis. Of this sum $650,000 are for "gold debts" payable without reference to Mixed Claims Commission; $200,000 for arrearages in salaries to employees who threaten a strike that would be serious; and $50,000 miscellaneous. The proceeds of the Ethelburga settlement will not go to the Government, nor will it be granted any future loans until January. I suggest three bases for discussion: (1) an advance to Nicaragua of proceeds of Ethelburga settlement; or (2) a new loan based on collection of the internal revenue under Dr. Thayer; or (3) the exercise of the option to purchase the Government railroad for $1,000,000 cash. WEITZEL. File No. 817.51/447. Brown Brothers and Company and J. and W. Seligman and Company to the Secretary of State. 1 NEW YORK, June 3rd, 1912. SIR: Referring to our letter to you of December 13th last, we beg to say that owing to the failure of the Ethelburga Syndicate, Limited, to carry out the contract of December 9th, therein referred to, the same became inoperative some months ago. We have recently negotiated on behalf of Nicaragua new contracts on the same subject with the Corporation of Foreign Bondholders, and beg to hand you herewith for your information copies of the following instruments: 1 (1) Contract dated May 25, 1912, between the Republic of Nicaragua and the Corporation of Foreign Bondholders, containing principally such portions of the proposed settlement as affect the holders of 1909 Bonds. (2) Another contract, also dated May 25, 1912, between the Republic of Nicaragua and the Corporation of Foreign Bondholders, to the original of which a copy of the above contract (1) is annexed as "Schedule A." (3) Letter dated May 25, 1912, from the Corporation of Foreign Bondholders to Brown Brothers and Co. and J. and W. Seligman and Co., representing the Republic of Nicaragua. (4) Letter dated May 25, 1912, from the Republic of Nicaragua and Brown Brothers and Co. and J. and W. Seligman and Co. to the Corporation of Foreign Bondholders. (5) Contract dated May 25, 1912, between the Republic of Nicaragua and Brown Brothers and Co. and J. and W. Seligman and Co., to the original of which Contracts (1) and (2) and of Letter (3) above mentioned, are annexed as "Schedules L, K and Y" respectively. The above contracts were all expressly authorized by the Republic of Nicaragua. Respectfully yours, BROWN BROTHERS AND COMPANY. Not printed. File No. 817.51/450. The Secretary of State to the American Minister. [Telegram-Paraphrase.] DEPARTMENT OF STATE, Wands transmits from Paris the recommendation yesterday of the French bondholders' committee to accept plan for settlement of the 1909 loan question. Similar action yesterday by the committee of the council of foreign bondholders of London. Wands requests that Schoenrich be informed that the matter he referred to in letter of April 13 can probably be arranged. At the Department yesterday Mallet-Prévost seemed hopeful of early relief for Nicaragua. File No. 817.51/465. The American Minister to the Secretary of State. [Telegram-Extract.] AMERICAN LEGATION, KNOX. Managua, June 29, 1912. The bankers' delay has compelled the Government of Nicaragua to make certain internal loans the conditions of which are improvident if not unconscionable. WEITZEL. File No. 817.51/487. Brown Brothers and Company and J. W. Seligman and Company to the Secretary of State. NEW YORK, August 2, 1912. DEAR SIR: On behalf of the National Bank of Nicaragua, incorporated, we beg to hand you herewith, for your information, copy of a letter which we have today written to Ernest H. Wands, Esquire, Financial Agent of Nicaragua, and copy of his reply. In making the loan to which those letters refer, we assume that the Bank, in case of necessity, will receive the same measure of protection which may be afforded to us in connection with loans heretofore made by us to Nicaragua under the Treasury Bills Agreement of September 1, 1911. and the Supplemental Loan Agreement of March 26, 1912. We remain [etc.] BROWN BROTHERS AND COMPANY. [Inclosure 1.] Brown Brothers and Company and J. and W. Seligman and Company to the Financial Agent of Nicaragua. NEW YORK, August 2, 1912. DEAR SIR: We are today in receipt of a telegram from the President of Nicaragua, requesting us to make an immediate loan of $100,000 to his Government for the purpose of enabling it to reestablish order. As you are aware, the National Bank of Nicaragua, recently incorporated pursuant to the terms of the Treasury Bills Agreement of September 1, 1911, opened for business at Managua on August 1st. The entire capital stock of that Bank is pledged with us as security for the various loans which we have heretofore made to the Republic, and under the terms of our agreement with Nicaragua, the Bank is under our management and control. The Bank has, or can procure, the funds necessary to make the loan above referred to, and we are disposed, in that form to comply with the request of President Díaz. Before doing so, however, we desire to know whether such a step would meet with your approval as the Financial Agent of Nicaragua. If this loan should be made, we beg to inform you that it is our intention to file a copy of this letter and of your reply with the Department of State at Washington, in order that the loan may receive the same measure of protection which the United States Government will doubtless extend to the loans heretofore made by us. Yours very truly, BROWN BROTHERS AND COMPANY, [Inclosure 2.] The Financial Agent of Nicaragua to Brown Brothers and Company and J. and W. Seligman and Company. NEW YORK, August 2, 1912. DEAR SIRS: I beg to acknowledge receipt of your letter of this date with reference to a loan of $100,000 proposed to be made to the Government of Nicaragua by the National Bank of Nicaragua, Incorporated. In reply, I beg to say that the proposed loan meets with my entire approval. NOTE.-On August 5, 1912, the text of the loan convention between the United States and Nicaragua (see p. 1074) was made public. File No. 817.51/487. The Acting Secretary of State to Brown Brothers and Company and J and W. Seligman and Company. DEPARTMENT OF STATE, Washington, August 19, 1912. GENTLEMEN: The Department acknowledges the receipt of your letter of the 2d instant in which, on behalf of the National Bank of Nicaragua, Incorporated, you transmit, for the information of the Department, a copy of a letter dated August 2d to Ernest H. Wands, Esquire, Financial Agent of Nicaragua, relative to an immediate loan of $100,000 requested by the President of Nicaragua, and a copy of Mr. Wands' reply thereto. In reply you are informed that this Government always exercises every proper effort to protect legitimate interests abroad insofar as the particular facts and circumstances of the given case may warrant. However, you will of course appreciate that this Department could not undertake in any way to guarantee investments of American capital in foreign countries. Moreover, it should be stated that it is the custom of the Department to decline to express an opinion as to the attitude which it might take with reference to anticipated occurrences which might, under the rules and regulations prescribed by international law, warrant representations by this Government in behalf of its citizens. There is urgent need of money to pay troops and meet other legitimate expenses necessarily incurred in putting down disorders. But recourse to internal loans would be decidedly unpopular and inadvisable. Therefore I strongly recommend that bankers advance additional sums on equitable terms for at least three months, during which normal conditions will probably be established. WEITZEL File No. 817.51/503. The American Minister to the Secretary of State. [Telegram.-Paraphrase.] AMERICAN LEGATION, Managua, September 23, 1912. The Government is fast losing control of the situation. It is extremely unfortunate that additional loan mentioned in my September 101 has not been agreed to by the bankers. There is immediate need for $50,000, but the Government has no means of raising it except through the bankers or by levying contributions; the latter was the rebels' method and should be avoided by the Government. The President offers three alternative propositions: (1) an advance of $50,000 gold from customs revenues, the bankers to reimburse themselves from some source under the supplementary contract; (2) exercise by the bankers of their option on 51 per cent of railroad under an agreement to advance $100,000 monthly for five months and the remainder at a time to be agreed upon; (3) an advance of $100,000 monthly for five months and an option on the remaining 49 per cent of the railroad at a valuation of $1,000,000. WEITZEL. Not printed; see September 14. File No. 817.51/505. The Acting Secretary of State to the American Minister. [Telegram.-Paraphrase.] DEPARTMENT OF STATE, Washington, September 26, 1912. The following just received from the bankers: The plan we submitted, and accepted by Nicaragua, involved no delay and will, we trust, be promptly adopted. WILSON. File No. 817.51/515. Brown Brothers and Company and J. and W. Seligman and Company to the Secretary of State. NEW YORK, November 13, 1912. 1 SIR: Referring to your telegrams to us of Sept. 16th and Sept. 25th, and our telegrams to you of Sept. 17th1 25th and 26th, we beg to say that the negotiations with the Government of Nicaragua therein referred to have resulted in an agreement between the Republic and ourselves, dated November 4th, 1912, a copy of which we enclose herewith for your information. In accordance with the provisions of this agreement, we have already released and turned over to the Republic $100,000 of the customs moneys heretofore collected, and out of the moneys received as the result of the Ethelburga Syndicate settlement have set aside $400,000 which we now hold as a separate fund under the agreement to be paid over to the Republic in installments at such times and in such amounts as may be agreed upon between the President of the Republic and us. Respectfully yours, BROWN BROTHERS AND COMPANY. NATURALIZATION CONVENTION BETWEEN THE UNITED STATES AND NICARAGUA. Signed at Managua, December 7, 1908; ratification advised by the Senate January 21, 1909; ratified by the President March 1, 1909; ratified by Nicaragua March 28, 1912; ratifications exchanged at Managua March 28, 1912; proclaimed May 10, 1912. BY THE PRESIDENT OF THE UNITED STATES OF AMERICA. A PROCLAMATION. Whereas a Naturalization Convention between the United States of America and the Republic of Nicaragua was concluded and signed by their respective Plenipotentiaries at Managua, on the seventh day 67106°-FR 1912-70 1 Not printed. |